If you liked this, check out these posts:
- Behavioral Economics with Dan Ariely
- Management 2.0
- Executive Compensation
- World’s Most Ambitious Crowdsource
- My Favorite TED Talks of TED 2009
I was listening today to a Fresh Air interview from a couple of weeks ago on the reasons for the high cost of health care:
Highly informative and thought provoking. One thing that struck me was the discussion about how we don’t pay primary care physicians enough and that specialists make a majority of the dollars. This is not earth shattering news, but it I was reminded of a similar problem in higher education. Specialization is highly valued where as general studies and thinking/life skills are not, despite the fact that it’s these more general abilities and knowledge that determine how successful you are in your chosen trade (specialized or not). Same thing in medical care: it’s not the specialists who have the most impact on your health and mortality, it’s …
The following quotes are from a book describing a real set of events:
[The incident] is an extraordinary example of what happens when you get… a dozen people with an average IQ of 160… working in a field in which they collectively have 250 years of experience… employing a ton of leverage.
It’s hard to overstate the significance of a [government-led] rescues of a private [corporation]. If a [company], however large was too big to fail, then what large [company] would ever be allowed to collapse? The government risked becoming the margin of safety. No serious consequences had come about in the end from the… near-meltdown.
Was the incident:
a) The savings and loan scandal
b) The collapse of Enron
c) The sub-prime mortgage meltdown
d) none of the above
First correct answer gets to invest in an exciting new bridge project I’m involved with in New York!…
I just tweeted on a subject that I suspected would cause a stir, and so it has, I’m moving it here:
RafeFurst: I strongly support a soda tax! RT @mobilediner: check it out: a Soda Tax? http://amplify.com/u/dvl
coelhobruno: @RafeFurst what about diet soda? Would it be exempt?
RafeFurst: @coelhobruno no diet soda would not b exempt from tax. Tax should be inversely proportional to total nutritional content. Spinach = no tax
Lauren Baldwin: I do as well … and while they are at it they should tax fake fruit juice too.
Kevin Dick: I think this would be an interesting experiment. I predict a tax does not cause any measurable decrease in BMI.
Kim Scheinberg: New York has had this under consideration for a year. Perhaps surprisingly, I’m against it. In theory, people will drink less soda. In reality, it will just be another tax on people who can afford it the least.
Leaving aside the “rights” issues and …
What’s fascinating to me about this is not that it works so well and or that there might actually be support in the Obama administration for doing it on a national scale, but rather that there has not been a backlash against it yet. What are the odds that something like this will actually get implemented? Is it actually a good thing?
hat tip: Annie Duke’s mom…
Everyone has heard about the Large Hadron Collider, arguably the most ambitious and complex engineering project ever undertaken, anywhere. The purpose, no less ambitious, is to answer all sorts of burning questions about the nature of the universe, including whether the Standard Model of particle physics is valid. Given such ambition and high stakes, it would surprise most people that the LHC is managed in a collaborative manner with very little hierarchy. Essentially it’s a giant, crowdsourced science experiment.…
Short but brilliant TED talk by Joachim de Posada. I love the economic point he makes at the end.
I’m giving my “2009 Q1 award for most concise, lucid comment” to Paul Phillips for this gem:
Viewed from a thousand miles, the financial system has a incalculably large incentive to fail catastrophically as frequently as it can do so without killing the goose that lays the golden eggs.
As long as there is such a thing as “too big to fail” and trillions of dollars are available for siphoning, according to what logic can this cycle be dampened? Nobody has to explicitly pursue this outcome (although there are many who will) for it to be inevitable; the system obeys its own logic above all else.
[ commenting on Alfred Hubler on Stabilizing CAS ]
Dan Ariely had an interesting idea on NPR’s Marketplace today. Here’s the audio of the segment. The idea is to get tax payers thinking about how their tax dollars should be spent, thus getting them more civilly engaged. His research and that of others suggests that such activity would reduce the propensity to cheat on one’s taxes, and may even get people to pay more than they would otherwise.…
The main problem with executive pay is not that they are compensated too highly, but that there’s not enough pain for them personally when they do a bad job. I propose that the top three executives in all public companies be required to invest 100% of their salary in their own stock each year, with a decaying lockup period before they can sell.…
If you liked this talk (as I do), check out Ariely’s 3 irrational lessons from the Bernie Madoff scandal.…
In a March 2009 Wired article, Daniel Roth calls for radical transparency in financial reporting as the path to recovery and a more secure financial system. He argues that the reporting requirements today allow companies to obscure what’s going on and that the way to fix things is as follows. Embrace a markup language with which bite-sized chunks of standardly defined pieces of financial data are thrown out to the world so that users can crowdsource the true picture of a company’s financial health.…
In Chasing the Dragon, I wondered aloud whether we could dampen boom-bust cycles in the financial system with an economic equivalent of a controlled burn. Kevin suggested that “generic countercyclical policies” might work. Underlying both mine and Kevin’s thinking is the idea that you can possibly do better (for the world as a whole) by (a) understanding the entire economic system better and (b) enacting policies which are in line with that understanding. In contrast to these assumptions are a point of view articulated by one of the readers on a different thread:…
Kevin just posted about a great article by Felix Salmon in Wired. I underlined three quotes in my reading of it:
- “Correlation trading has spread through the psyche of the financial markets like a highly infectious thought virus.” (Tavakoli)
- “…the real danger was created not because any given trader adopted it but because every trader did. In financial markets, everybody doing the same thing is the classic recipe for a bubble and inevitable bust.” (Salmon)
- “Co-association between securities is not measurable using correlation…. Anything that relies on correlation is charlatanism.” (Taleb)